Cairn India

Cairn India declared its Q1FY15 numbers late in the evening yesterday, post market hours. And today, the market has reacted by giving it a big thumbs down, being currently the biggest loser.

The company posted a whopping 65% drop in its consolidated net profit for the quarter at Rs.1093 crore, down 65% (YoY) while sequentially, it was down 64%. This fall is attributed to the exceptional cost of Rs.1627 crore, which was on account of change in the method of depreciation. What helped to shore up the fall further was a forex gain of Rs.99 crore though much smaller than the gain of Rs.682 crore it had in previous Q1. EBITDA for the quarter came in at Rs.3120 crore, down 15% (QoQ) though up 3% (YoY) while EBITDA margin slipped down by almost 500 bps (QoQ) to 70%.

Revenue for the quarter, post profit sharing with the Government of India and the royalty expense in the Rajasthan block came in at Rs.4483 crore, up 10% (YoY) though down 11% sequentially.  YoY, revenue rose on account of higher volumes and realizations despite higher profit petroleum tranche in Rajasthan. During the quarter, total profit petroleum was Rs.1,778 crore (US$297 million) including Rs.1,533 crore (US$ 256 million) for Rajasthan block. For the quarter, royalty for the RJ block was Rs.1,069 crore (US$ 179 million).

In terms of production, average daily gross operated production for the quarter was at 217,869 boepd (226,597 boepd including internally consumed gas). Rajasthan production at 183,164 boepd, in line with FY15 guidance. Ravva production at 23,940 boepd, 4D infill wells contributing successfully. Cambay production at 10,765 boepd, sustaining well.

Looking ahead, ongoing net capital investments program of $3Bn will continue through end of FY17. The company hopes to establish its 3bn boe hydrocarbons in-place, significantly ahead of schedule. With renewed focus on appraisal and development, the company aims to accelerate 2C-2P resources-reserves conversion. This strategy will contribute to the advancement of reserves booking in order to achieve our stated 2P RRR target of 150% over a three year period.  It has set a target of a 3 year production CAGR of 7-10% from known discoveries with flat production in FY15.

Cash and Cash equivalents as at June 30, 2014 were Rs.13,561 crore in rupee funds and US$ 922 million in dollar funds.